Residential rents are slumping and landlord concessions increasing, following an influx of property to market in the Northern Emirates. Meanwhile, utility snafus have hampered office rents, but government efforts at real estate market stimulus and oversight are in the works. See the following article from Property Wire for more on this.
A real estate recovery is still some way off across the Northern Emirates with apartment rentals flat, prices down by up to 8% and villa prices down on average by 12%, the latest figures show.
Tenants are move back to Sharjah from neighboring emirates as supply increase forces prices down, the report also shows. Studios in Sharjah continued to out perform other residential sectors as rents remained the same in the second quarter as the first with prices between Dh16,000 and Dh24,000 per annum, a new report from Asteco Property Management shows.
But one bedroom apartments have seen prices fall 8%, two bedroom apartments are down 4% and three bedroom apartments have dropped 6%.
‘One of the major factors underlying Sharjah’s rental adjustment is the amount of supply coming to the market. However, we have witnessed over the last few months that there is some interest in these areas as some towers have completed providing tenants with low rents, larger properties and better facilities,’ said the report.
‘Conversely the three bedroom villa market has seen rents drop at a much steeper pace over the last three months. The rental rate for a typical three bedroom apartment has put downward pressure on the villa market, particularly given the variances in accessibility, quality and value for money,’ it added.
In Ajman, Ras Al Khaimah, Umm Al Quwain and Fujairah prices continued to fall at rates similar to the first quarter in most areas in the three months to the end of June, according to the report.
Rents for three bedroom apartments on Ajman Corniche have dropped by 12% compared with 7% per cent in the first quarter of the year. But the area continues to attract interest from people working in the emirate, although the market is competitive and landlords, especially private landlords, are offering incentives and dropping their prices to secure occupancy, the report points out.
Developers in Ajman are aiming to build confidence in the real estate market by introducing construction linked payment schedules.
‘Although the last three months have not seen any improvements in the real estate market, the Northern Emirates various government departments are striving to ensure a better regulatory environment and planning on new ways to stimulate demand,’ said Elaine Jones, chief executive officer at Asteco Property Management.
Office rents saw a slight price decline in the second quarter from Dh40 to 75 per square foot to Dh40 to 70 per square foot but the tourism master plan currently being devised by the Government is expected to have a positive impact on prices for all asset classes. However, the past three months have not been so positive with utility problems severely hampering the city’s appeal.
‘Utility connection issues continue to be the primary problem in the Northern Emirates, affecting many households and businesses. The Sharjah office market continues to show rental rate decreases with an average reduction of 6% in the last three months, similar to the previous quarter,’ the report said.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.